What does this mean for estate planning? 

• Single individuals or couples with more modest estates that are not close to the $2 million value can breathe easy and not have to focus their planning efforts on the state estate tax.
• Individuals and couples who are worth more than $2 million should remain aware of fluctuating values to ensure they do not inadvertently cross the $2 million mark.  If they do, they should be able to reduce or eliminate the tax with some very practical and accessible planning solutions.
• Couples who together are or expect to be worth more than $2 million still need to plan for the estate tax with proper trust planning so that they do not waste the first-to-die spouse’s $2 million exemption.  If married couples do not use tax sheltered trusts, they will lose out on the ability to collectively shelter $4 million, and stand to pay significant unnecessary taxes on the second spouse’s death.
• Couples of any net worth where one or both spouses are not US citizens need to be extra proactive to ensure they avail themselves of the relevant tax sheltering opportunities.

What if I already have tax-sheltered trust planning in place? 

• If you created your estate plan with EPLO, your trusts should not require any amendments to avail yourself of the newly increased exemption.
• The new law is a great opportunity to review your plan and see if with the new higher exemption you can take advantage of directing more assets to the trusts at the first spouse’s death to double the protection.  You might already be adequately funded, but a quick review discussion can help us figure that out together.

Do I still need to do estate tax planning in MA if my spouse and I are worth less than $4M? 

Absolutely!  First, tax laws are very unpredictable.  For instance, our current Federal exemption of $12.92 million (as of 2023) is going to dramatically drop in the next couple of years.  Even with a higher state estate tax exemption (or no state estate tax at all, in other states), we can’t fall asleep on the Federal tax. Additionally, if you don’t use tax-sheltered trusts to strategically control/direct assets at each of your deaths, you will completely waste/forfeit the first-to-die spouse’s $2 million shelter.

Unlike the Federal law, Massachusetts still does not allow surviving spouses to “port” (roll over) the first-to-die spouse’s unused exemption.  Bear in mind that the entire estate is subject to the estate tax, including life insurance benefits (even ones provided by your employer), so a person’s “gross taxable estate” can get sneaky high. Finally, the vast majority of people who do true estate planning are using a trust for many other reasons – probate avoidance, blended family planning, inheritance protection for children/beneficiaries, and nursing home protection, to name a few.  It is virtually effortless to include standard estate tax sheltering provisions within those structures, and there’s no downside to having them in there.

The post Legislative Update: MA Increases Estate Tax Exemption appeared first on Estate Preservation.

Putting ownership of your home into the right kind of trust offers all the protections of getting the house out of your ownership – and away from nursing home exposures – without the many downsides of putting it into someone else’s name.  With a properly designed trust, you can still control who serves as trustee and change your mind about the future beneficiaries upon your death.  The house can remain your asset for tax purposes, providing a shelter from capital gains during your life and upon your death.  You can receive rental income on real estate as well as interest/dividends on investments while still protecting the assets themselves.  Most importantly, you don’t have to worry about unintended risks to your home because the trust should be designed to insulate the property during your life from any financial pitfalls your children may encounter.

The choice seems clear, but a discussion with an EPLO attorney can help you navigate your own unique situation to be sure you’re making the right decision to protect yourself and your family.

The post Protecting your home: put it in the kids’ names, or use a trust? appeared first on Estate Preservation.

• Have there been any changes to your family since you last signed your will/estate documents?
  • Have you gotten married, divorced or become widowed?
  • Have any children been born or passed away?
• Are your beneficiaries in a different stage of life since you last updated your documents?
  • Were your children young/minors when you signed your documents, but now they’re adults?
  • Have any of your children gotten married, divorced or had children?
  • Has a child or other beneficiary experienced a disability event and is now receiving benefits?
  • Is a child or other beneficiary facing challenges such as addiction, creditor issues or other financial vulnerabilities?
• Are you in a different stage of life?
  • Have you retired, and perhaps you’re beginning to think about long-term care/nursing home exposures?
  • Are you considering or have you moved to another state?
• Have there been any changes with the people you’ve named as fiduciary decision makers (executors, trustees, guardians, etc.) under your documents?
  • Has any decision maker died, moved or otherwise changed their role in your life?
  • Are your children now grown and should be named as decision makers?
  • Has any decision maker “aged out” of the role (example: a parent you named who is now elderly and might not be able to fulfill fiduciary duties)?
• Have you experienced any significant changes in your assets?
  • Is your estate significantly larger than when you last updated your plan?  Should you now consider more proactive estate tax planning, or more protective inheritance planning for your children/beneficiaries who will receive a larger inheritance?
  • Have you acquired assets that might require special planning? (Example: established a business that needs a succession plan, or a rental property that needs asset protection)
• Have you experienced any significant health changes?
  • Beyond the simple aging process (which itself often brings about new planning considerations), if you’ve experienced any changes to your cognitive or physical status, reexamining your documents is especially critical in case you later lose your ability to sign.

There is one rule of thumb: when in doubt, ask!  If you are a current EPLO client, you are welcome to contact us at any time to have an update discussion with one of our attorneys or paralegals.  If you are not a client, we offer no-cost, no-obligation consultations where one of our attorneys can review your existing documents and circumstances to help you determine if any changes should be made.  A simple conversation might be all you need to reassure yourself that you are in a good spot – or that you have exposures that a few signatures can address.  Either way, stop wondering and let us help you find the answers!

The post Time to update your estate plan? appeared first on Estate Preservation.

Under the SECURE ACT (Setting Every Community Up for Retirement Enhancement Act), which became law in 2020, long-held strategies for estate planning and financial planning were up-ended. Notably, the new law eliminated the ability for most beneficiaries who inherit retirement accounts to “stretch” the taxable distributions over their actuarial life expectancies, as was previously allowed. On a positive note, the law contained favorable provisions for retirement account owners, including removing the age limit for IRA contributions and the age to begin taking required minimum distributions (RMDs) to age 72.

On December 29, 2022, SECURE 2.0 Act was signed into law, providing a slate of changes that are critical to understand as you plan for your retirement or have already retired.

Key changes in the law include:

• The age to start taking RMDs increased to age 73 in 2023 and to 75 in 2033.
• The penalty for failing to take an RMD will decrease to 25% of the RMD amount, from 50% currently, and 10% if corrected in a timely manner for IRAs.
• Effective in 2024, RMDs will no longer be required from Roth accounts in employer retirement plans.
• “Catch-up” contributions will increase in 2025 for 401(k), 403 (b), government plans, and IRA account holders.
• Defined contribution retirement plans will be able to add an emergency savings account associated with a Roth account.
• With regard to charitable planning goals, with retirement assets, people who are age 70 ½ and older may elect as part of their Qualified charitable distributions limit a one-time IRA gift up to $50,000.
• Beneficiaries of College Savings Plans (529 Plans) may rollover unused plan funds into and IRA starting in 2024.
• The law also clarified previous ambiguities regarding stretch rules for retirement accounts that are payable to trusts.

These are just a few of the many changes to the law. While maintaining your estate plan has always been important, the SECURE Act legislation and SECURE 2.0 Act laws may warrant special attention and review of your current estate plan. In addition to reviewing estate documents and account designations, account owners should also contact their financial planners to consider lifetime strategies that minimize tax impact to their accounts and future beneficiaries.

The post Legislative Updates: SECURE 2.0 Act appeared first on Estate Preservation.

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The post American Cancer Society Honors Carol F. Barton for the Second Time appeared first on Estate Preservation.

The post Partner Brendan J. King featured in Worcester Business Journal appeared first on Estate Preservation.

April is National Autism Awareness Month. Traditionally this has been a month of support, outreach and understanding for those dealing with autism. With the COVID pandemic, that support network (families, educational/medical professionals, and members of the community) has become more important than ever.

Now, in April of 2021, there are glimmers of hope on the COVID front. An increasing number of individuals have received vaccine shots, people are starting to hesitantly come out of isolation and children are beginning to return to school.  All good news.  However, for individuals with autism, these shifts are both welcome and worrisome.

For individuals with autism who had to learn new behaviors during COVID, there is now the challenge of learning more behaviors for what many are calling the “new normal.”

Fortunately, public awareness organizations and social service networks can offer support and advice for those struggling to understand and cope with “What’s next?”  This support includes finding legal protection, benefit programs, and social services.

In this uncertain world of COVID, it is important that your special needs child have a carefully prepared estate plan, which includes:

• Last Will and Testament: naming a legal guardian/conservator for your child in the event of your death; without this designation, a judge will decide who will care for your child.
• Durable Power of Attorney: An individual that you appoint who would handle your legal and financial affairs in the event of your inability to do so.  If your child has reached age 18 and is able to understand and sign documents, he/she should also sign a Durable Power of Attorney, which could avoid the need for a court-appointed conservator.
• Health Care Proxy: In addition to naming your own health care decision-makers, your adult special needs child may be able to sign his/her own document to name health care agents and possibly avoid court guardianship proceedings.
• Special Needs Trusts (SNT): SNTs come in different forms – first party vs. third party; revocable vs. irrevocable; funded vs. standby.  The purpose of these trusts is to allow your child to benefit from assets while ensuring that their health and welfare is maintained through maximum eligibility for benefits such as SSI, Medicaid and other government programs.  The goal is to create the best standard of living possible for your child.  The funds of the SNT are also protected from creditors, and are earmarked so that they can only be used for the child’s benefit during his/her life.
• Letter of Intent or Statement of Wishes: Although not a legal document, this is your opportunity to describe how to best support and care for your loved one, and to help make the transition from your care to another’s easier. Medical information, foods enjoyed or to avoid, comments about what helps, hurts, scares or reassures your loved one, are among the items that can be included in the statement.

Personally touched by autism within our EPLO family, we are proud that we can help with legal protection for your loved ones with special needs.  It is our mission to assist anyone dealing with autism who is in need of our services – whether a phone or zoom conversation, complimentary planning consultation, or resources available on our website (under Special Needs Planning).

Meanwhile – as we honor Autism Awareness Month, EPLO would like to say thank you for allowing us to help.

The post Autism Awareness Month appeared first on Estate Preservation.

Each year the American Cancer Society honors one or two exceptional partners of its Planned Giving Team. The National Professional Advisor (NPAN) award recognizes Carol’s high level of dedication to both the ACS’ mission and its Planned Giving Program while promoting charitable estate giving to fellow advisors, clients and constituents. Carol’s association with the American Cancer Society (ACS) began in 2008 as a volunteer at the organization’s Hope Lodge in Worcester, MA. She later moved on to serve in national roles, most recently serving as Chair of the Nationwide Gift Planning Advisor Council of ACS.

According to Attorney Barton, “Combining my desire to volunteer and working with ACS allows me to use my legal skills in a productive way. It permits me to assist individual donors to allocate their assets to fund cancer research, support caregivers and the network of people involved when a loved one receives a cancer diagnosis.”

Carol has been an associate attorney at Estate Preservation Law offices, Worcester, MA since 2013. Her practice focuses on estate planning, estate and trust administration, elder law and Medicaid planning, and Special Needs and disability planning.

The post American Cancer Society Honors EPLO Attorney Carol F. Barton appeared first on Estate Preservation.

As members of the small business community and estate planning professionals, we have been distressed and saddened to watch the debilitating health and economic impact of the pandemic unfold.  Unfortunately, we have seen many local businesses, law firms among them, close and/or drastically change the way business is conducted throughout the pandemic and even beyond.

Our approach to COVID-19 is multi-faceted. As an essential business, we made the decision to remain open and fully operational to handle the estate planning and related needs of our clients.  Expanded remote meetings were implemented early in March, and have proven to be a safe and convenient way to continue servicing our clients.

With all our staff engaged in the operations of the practice and additional hires since the pandemic, here is how we continue to accommodate client needs, without disruption, today:

• We remain fully operational during business hours.
• Clients who prefer to meet at our office may do so and be comfortable knowing that we are compliant with state guidelines regarding safety, sanitation and social distancing.
• We are well-versed in providing remote services for those of you who prefer video conferencing, emails, phone meetings, etc.
• We have the capacity to work with your professional advisors to ensure all bases are covered in getting your estate plan completed.
• For clients who are unable to attend in-person signing meetings, whether because of distance or personal safety concerns, a new (and temporary) law in Massachusetts allows documents to be witnessed and notarized remotely via a recorded video conference.

We’ve heard and experienced firsthand people’s concerns about the uncertainty that the pandemic has brought to their lives.  Each situation is unique, but everyone feels the same urgency to ensure that the needs of themselves and their loved ones will be met in the event of incapacity, illness or death.  We stand ready to help you as well. Whether you need an estate plan or want to review and/or update your current planning documents, please contact us at 508 751-5010 or use the Request a Free Consultation form on this page.

From the beginning, we did not let the pandemic define us; rather, our goal has been to ensure no disruption to the steadfast, convenient, and quality service clients have come to expect from EPLO attorneys and staff.

The post COVID-19: Business of serving you continues uninterrupted appeared first on Estate Preservation.